Recently I traveled to Thailand, whose strong economic growth and significant poverty reduction makes it a compelling development story. Much of the country’s growth has come on the back of mostly imported fossil fuels, which account for about 80 percent of the nation’s power.
Tens of billions of dollars in investment will be required to shift the country to a more low-carbon growth path. In 2009, Thailand had attracted less than $70 million in investment for its fledgling solar PV and wind industries, with only 43 MW and 3 MW of capacity online from each respective technology.
That same year, the CIF Clean Technology Fund (CTF) committed more than double that, with $170 million to help drive clean technology investments by the private sector, and to help companies move faster towards cleaner energy.
This included $30 million of CTF funds that have directly attracted about $150 million in investments from the private sector to deploy two of Thailand’s first utility-scale wind projects. The early CTF investments helped demonstrate the feasibility of wind power in Thailand, and to catalyze a growing, $2 billion market that will be pivotal for Thailand to meet its increasingly aggressive long-term clean energy goals.
I am always energized by seeing our work in action. Once we arrived in Thailand, the impact of CTF investments quickly became evident. Joined by our partners from the Asian Development Bank on a rainy Bangkok day (made worse by the city’s notorious traffic), I visited some of the visionary business leaders making the decision to invest, at scale, in clean energy. I was proud as I listened to business leaders speak about how the CTF was helping their businesses move with confidence in that direction.
- At the Electricity Generating Public Company (EGCO), I applauded how the company – the second largest private power producer in Thailand, used CTF funds to enter the wind power market. The 7.5 MW, CTF-supported project (Theppana) then demonstrated a viable financing structure that paved the way for their 90 MW Subyai wind farm, which also received CTF support. EGCO is now in discussions about expanding this line of business at home and abroad.
- At Solar Power Company Group (SPCG), I enjoyed a fruitful conversation with the formidable Wandee Khunchornyakong, CEO of SPCG and a long-time CTF partner and proponent, of solar and CTF.
- We ended the day at Bangchak Petroleum Public Company Limited (BCP), which began as a petroleum company, and has since moved deeper into renewables with support from an early CTF/ADB investment into their 50 MW Provincial Solar Project. The company’s clean energy unit is aggressively looking to grow its renewable energy portfolio and even considering more frontier technologies such as solar PV/battery hybrid systems.
These were fascinating visits, which underlined the critical role that targeted, large-scale CTF capital can play to help developers and investors make pioneering moves towards clean energy sources – by de-risking targeted sectors and driving follow-on investments.
It was also important for me to see how these projects were making a difference on-the-ground, for the communities living with wind and solar in their backyard. So, we made the five-hour drive to Chaiyaphum Province, to visit the Theppana wind project. There, we were introduced to Sa-ing Sordploy, who, through an interpreter, told us that her income had gone from about $5,000 per RAI (1 RAI = 0.40 acres) of land per annum from farming cassava to $8,000-10,000 per RAI, from leasing land to the wind project.
Beyond the leasing income, she had also seen an increase in the size of her cassava crop because she can now afford to invest in fertilizer. And on a personal level, Sordploy beamed with pride as she spoke about being able to help pay her niece’s education expenses in Bangkok, something that would not have been possible based on the family’s income before the wind project.
While tens of billions of dollars in investment will be required to shift the country to a more low-carbon growth path, the early investments helped demonstrate the feasibility of wind power in Thailand, and to catalyze a growing, $2 billion market that will be pivotal for Thailand to meet its increasingly aggressive long-term clean energy goals.
I witnessed the tangible gains at the community level, which are byproducts of these projects, for example, paved roads, support for local schools, and the hiring and training of local people who were then able to work on other clean energy projects in the region using their new skills.
This was one of many stories of real and measurable impacts on real people, because of CTF-supported projects.
And it was personally inspiring for me to see women at the heart of Thailand’s fast track to a low carbon economy—from making investment decisions in the boardroom to providing administrative support and landscaping gardens at the solar farms we visited.
Seeing women so visible and active in Thailand's clean energy industries, validates the shift we made with our Gender Action Plan, from mainstreaming gender to making it a tool for transformation.
Despite these successes, clean energy still faces challenges as large amounts of fossil fuel-based energy generation are planned for development, in Thailand and other CTF countries.
Addressing this unfinished agenda demands innovation on multiple fronts:
- Financial and business model innovation, including crowding in private sector financing and institutional investment at scale;
- Government ambition through supportive regulations and a strong enabling environment; and
- Strong partnerships such as those that the CIF has developed with our five MDB partners, governments, the private sector and other stakeholders.
The time for this increased ambition is now. With the results, lessons and wealth of knowledge gained from our $8.3 billion portfolio with 300+ projects in 72 countries, we look forward to playing our part in this critical work.